For the first time last year, I made a distribution from my IRA. TurboTax created a Form 8606. I discovered that it used as the Line 2 Basis a value for the IRA that it has been dragging from year to the next since at least 2006. I looked at each of these years, and the number it used in the 8606 came out the IRA Worksheet.
I think the IRA worksheet value was the what I had in my IRAs at some point in time. I must have filled out the IRA Worksheet and then never updated it as the value of the IRAs changed. At this point, the IRA has a good deal more in it.
In 2006 and before, I was making annual traditional IRA contributions, usually up to the limit. That said, the value that TurboTax had in the IRA Worksheet was not some convenient round number, so I am not sure if it was a number that I had plugged into it by looking at the balance of the all the IRAs I had and which would have earned interest, and that would explain the not-round number.
Anyway, shouldn't I update 8606 Line 2 to the actual IRA basis as shown in my bank statement for the cost basis? Because the funds are in an investment account, the basis for everything is about 2 years old.
The thing is, as I understand the form, going line by line, if I start out with a Line 2 basis of 0 as the 8606 instructions suggest doing, then Line 10 is a zero and of course Line 14 is 0 (I didn't make any non-deductible contributions or do any conversions).
Using the old IRA worksheet value as the Line 2 basis doesn't make a lot of sense either - it seems like it should either be 0 or the current bank statement basis.
Thanks in advance!
